Past U.S. news-industry collaborations, which have been, fatally, about making profits for themselves and there backers — rather than about creating a marketplace where all can profit.

By Bill DensmoreRJI Fellow

Consumers need a simple, secure way to access, share and pay for valuable information from multiple services and sources. News organizations – legacy and new – would like to be the best-possible source for those users to receive a timely diet of information that matters.

Now, people on the go want to efficiently access the broadest range of multimedia content customized to their needs – in a single, simple action. Achieving this simplicity will require the coordination of publishers, content licensors, aggregator and usage trackers, a range of stakeholders currently unfocused on such collective activity.

When it comes to the future of the news business and, maybe, journalism writ large, there are few folks who would argue that the interplay between and focus on three mega-issues, all sharing a common first letter and perhaps more than that — personalization, privacy and payment — will determine a great number of things. Sustainability is at the top of the list.

If the Reynolds Journalism Institute (RJI) could throw a switch or press a button and create an organization that could weave those issues together and serve as a clearinghouse for payments, a protector of privacy and technological whiz kid for personalization, life would be good.

But there’s no switch to throw or button to push. The amount of coordination, collaboration and overall strategic thinking required is significant. But that doesn’t make the problem go away or lessen the urgency. So, in the spirit of setting out on a long journey, RJI takes today a first step: Helping defining a solution and organizing a first step toward making it real.

In the last decade, technology-based companies such as Google and Facebook have invented and grown the digital-advertising business, leaving traditional publishers far behind. And Apple has credit-card-based accounts of over 800 million iTunes users. Many experts have concluded the news industry cannot compete for the attention of the public without dramatic new approaches.

Three views:

“If you’re going to base your entire business on advertising, we all know how the story ends,” Raju Narisetti, senior VP of strategy for News Corp., said in DigiDay podcast posted June 19. “Growth in digital audience does not equal growth in revenue. That was a classic mistake in digital we all made: thinking we could grow the audience significantly, and somewhere along the way we’ll make more money digitally than we make in print. That has turned out to be completely not true. The supply of journalism on the Web is infinite.”

“I think the advertising business has been amazing as far as supporting journalism in the U.S. since World War II,” David Gehring, a former Google executive now with The Guardian U.K., said earlier this year. “We need another economic model that will support journalism in the digital economy for another 100 years. As so it has to be a viable thing for both the platforms and the publisher.”

“There is a black hole in the internet universe that is sucking most of the revenue into it,” John Paton, outgoing CEO of newspaper publisher Digital First Media, said of the largest search providers and social networks. “They have 70% of the mobile ad market. And that is only one of the challenges of the industry. The other is simple; the publishers know next to nothing about their customers. And what little they know, they are giving away for free.” Paton added from a stage in Oslo, Norway in mid-June 2015: “Our customer knowledge at this stage, is relatively zero. Legacy business knowledge has not given us the level of data we need to function. We have to rethink those arrangements, because we are just giving it away for easy money. Facebook is building a walled garden, and we are providing them with our data.”

Thus, we may now be at an inflection point. Legacy news organizations realize they cannot continue to exist in shrinking silos with customer relationships controlled by others. They must adopt common technologies, business rules and standards for managing user identity, privacy, trust and information commerce if they want to have the collective authority and scale of the platform companies such as Google, Facebook, Apple and Amazon.

The news industry lacks a system for variable pricing and exchange of individual items of news content in real time. Yet in the last 10 years, the advertising industry has innovated sophisticated “programmatic” technologies that allow in milliseconds the variable pricing, bidding, selection, tracking and billing of advertisements to targeted, unique consumers.

The news industry also lacks a common system for single-sign on or user authentication across multiple news websites. Yet in the last 10 years, Tier 1 U.S. universities running on the Internet 2 network have used open-source Shibboleth and SAML trust technology to achieve single login across 100 independent campuses and institutions.

The original architecture of the Internet identified connected machines by something called an IP number. But it provided no method for exchanging the identity of individual users. User names and passwords provided an initial solution. Then Netscape Communications Corp. invented “cookies” – the idea that a tiny file on your computer could associate your computer with previous activity. Banks and new financial-service companies introduced ways for using credit cards to purchase online.

User names, cookies and credit-card numbers have enabled remarkable services and features. They have turned the Internet from an academic and military experiment into a vital information superhighway of commerce and convenience. But they have also created challenges to user privacy. And payment services don’t yet economically work for aggregating small bits of information from many sources into a personalized service.

An important reason why legacy news organizations may have failed to embrace some protocols and platforms may be because those platforms were dominated or controlled by a for-profit, investor-owned entity. Either this engendered mistrust from the very start among parties who aren’t sure whose interests were paramount (such as Microsoft Passport), or the equity owners reached irreconcilable differences (as with New Century Network and Newsright).

That’s not what the ITE would be, or do.

The notion of non-equity ownership, shared governance and collaboration in getting the ITE going is core to the idea. It is designed in clear contrast to the emergence of a small number of proprietary Internet “platform” companies – Google, Facebook, Apple and others — that are dominating advertising and commerce, and an alternative to failed U.S. news-industry collaborations, which have been, fatally, about making profits for themselves and there backers — rather than about creating a marketplace where all can profit.

The notion of non-equity ownership, shared governance and collaboration in getting the ITE going is core to the idea. It is designed in clear contrast to the emergence of a small number of proprietary Internet “platform” companies – Google, Facebook, Apple and others — that are dominating advertising and commerce, and an alternative to failed U.S. news-industry collaborations, which have been – fatally – about making profits, rather than about creating a marketplace where all can profit.

By Bill Densmore

Consumers need a simple, secure way to access, share and pay for valuable information from multiple services and sources. News organizations – legacy and new – would like to be the best-possible source for those users to receive a timely diet of information that matters.

Now, people on the go want to efficiently access the broadest range of multimedia content customized to their needs – in a single, simple action. Achieving this simplicity will require the coordination of publishers, content licensors, aggregator and usage trackers, a range of stakeholders currently unfocused on such collective activity.

In the last decade, technology-based companies such as Google and Facebook have invented and grown the digital-advertising business, leaving traditional publishers far behind. And Apple has credit-card-based accounts of over 800 million iTunes users. Many experts have concluded the news industry cannot compete for the attention of the public without dramatic new approaches.

Three views:

“If you’re going to base your entire business on advertising, we all know how the story ends,” Raju Narisetti, senior VP of strategy for News Corp., said in DigiDay podcast posted June 19. “Growth in digital audience does not equal growth in revenue. That was a classic mistake in digital we all made: thinking we could grow the audience significantly, and somewhere along the way we’ll make more money digitally than we make in print. That has turned out to be completely not true. The supply of journalism on the Web is infinite.”

“I think the advertising business has been amazing as far as supporting journalism in the U.S. since World War II,” David Gehring, a former Google executive now with The Guardian U.K., said earlier this year. “We need another economic model that will support journalism in the digital economy for another 100 years. As so it has to be a viable thing for both the platforms and the publisher.”

“There is a black hole in the internet universe that is sucking most of the revenue into it,” John Paton, outgoing CEO of newspaper publisher Digital First Media, said of the largest search providers and social networks. “They have 70% of the mobile ad market. And that is only one of the challenges of the industry. The other is simple; the publishers know next to nothing about their customers. And what little they know, they are giving away for free.” Paton added from a stage in Oslo, Norway in mid-June: “Our customer knowledge at this stage, is relatively zero. Legacy business knowledge has not given us the level of data we need to function. We have to rethink those arrangements, because we are just giving it away for easy money. Facebook is building a walled garden, and we are providing them with our data.”

Thus, we may now be at an inflection point. Legacy news organizations realize they cannot continue to exist in shrinking silos with customer relationships controlled by others. They must adopt common technologies, business rules and standards for managing user identity, privacy, trust and information commerce if they want to have the collective authority and scale of the platform companies such as Google, Facebook, Apple and Amazon. The challenge for news and other publishers is not one of technology, but of coordination. In a report, “From Persona to Payment: A Status Report on the News Ecosystem, and a Challenge to Create the Next One,” RJI fellow Bill Densmore reaches eight conclusions, including these two:

The news industry lacks a system for variable pricing and exchange of individual items of news content in real time. Yet in the last 10 years, the advertising industry has innovated sophisticated “programmatic” technologies that allow in milliseconds the variable pricing, bidding, selection, tracking and billing of advertisements to targeted, unique consumers.

The news industry also lacks a common system for single-sign on or user authentication across multiple news websites. Yet in the last 10 years, Tier 1 U.S. universities running on the Internet 2 network have used open-source Shibboleth and SAML trust technology to achieve single login across 100 independent campuses and institutions.

The original architecture of the Internet identified connected machines by something called an IP number. But it provided no method for exchanging the identity of individual users. User names and passwords provided an initial solution. Then Netscape Communications Corp. invented “cookies” – the idea that a tiny file on your computer could associate your computer with previous activity. Banks and new financial-service companies introduced ways for using credit cards to purchase online.

User names, cookies and credit-card numbers have enabled remarkable services and features. They have turned the Internet from an academic and military experiment into a vital information superhighway of commerce and convenience. But they have also created challenges to user privacy. And payment services don’t yet economically work for aggregating small bits of information from many sources into a personalized service.

An important reason why legacy news organizations may have failed to embrace some protocols and platforms may be because those platforms were dominated or controlled by a for-profit, investor-owned entity. Either this engendered mistrust from the very start among parties who aren’t sure whose interests were paramount (such as Microsoft Passport), or the equity owners reached irreconcilable differences (as with New Century Network and Newsright). That’s not what the ITE would be, or do.

The notion of non-equity ownership, shared governance and collaboration in getting the ITE going is core to the idea. It is designed in clear contrast to the emergence of a small number of proprietary Internet “platform” companies – Google, Facebook, Apple and others — that are dominating advertising and commerce, and an alternative to failed U.S. news-industry collaborations, which have been – fatally – about making profits, rather than about creating a marketplace where all can profit.

When interviewed for the report, “From Persona to Payment” during 2014, the following 33 individuals expressed willingness to consider participating as founding steering-committee for envisioning and planning the Information Trust Exchange. All affiliations are for identification purposes only and do not imply endorsement of the Information Trust Exchange by the entities cited.

Back in November, former Vice President Al Gore gave an interview to to All Things Digital maestro and Wall Street Journal tech columnist Walter Mossberg. The details never showed up in print, but the video is online and today we expert a portion in which Gore — who began his career as a newspaper reporter — talks about the need for a business model for investigative journalism.

GORE: “Before I went to the House of Representatives in the mid-.70s, I was a journalist for five years, two years before that in the Army . . . I have watched the evolution of this business as a former practitioner.

“The most important part of the problem your getting at with your question is, in the transition to digital journalism and internet-based journalism, the medium is inherently so centrifugal — with billions of web pages — that you don.t get enough centripetal, critical mass to support business models that throw off enough revenue to adequately compensate large numbers of good investigative journalists. And the crowdsourcing fills the gap somewhat but there is really no substitute that I know for well trainee, excellent, investigative journalists who can make a decent living for themselves and their families by doing what they do best.

“And the rating of advertising — that has put a lot of newspapers in trouble around the world, has led to layoffs of these journalists and the
opportunities for journalists in the news space, they are there, but as I say the business models are still being defined. And I see Walt on television now and on the Internet TV and of course the Wall Street Journal, the New York Times, some other papers are edging into this space and doing an excellent job.

“But where will it go? It’s literally impossible to predict because it is by definition an emergent process. We.ll probably have some mobile, smart-phone journalistic model that really works. I consume a lot of news on my iPhone 4S and the iPad, but most of the high-quality stuff is still derived from newspapers and magazines and it is an urgent challenge to find new models to support high-quality journalism on the Internet. There are a lot of great examples of it, but it needs to be in every city, in every community and there needs to be a new standard business model that can be easily replicated to support journalism.”

MOSSBERG: You don’t have that model, you just think somebody needs to figure it out?

GORE: “Well I think that some people are hitting around it and CurrentTV is I think doing an outstanding job of it. We have one every journalistic award available in television. The Peabody Award, the DuPont Award, twice for the best journalist in America under the age of 35, two Emmies. I’m really proud of the quality. Our Vanguard series has been just been praised to the skies, rightly in my opinion, of course I.m biased. These men and women do a fantastic job. But its rare to see, you know you have 60 Minutes, you have some other great outlets, but increasingly programs that used to be focused on news will do polling of their own and blur the line between news and entertainment and drive toward a lowest-common-denominator because they are seen as profit centers and if they are not contributing enough to the bottom line then the orders come down, OK, find out what.s going to glue more eyeballs
to the screen. And so a program in the morning that used to provide news, I.ll turn it on in the morning it will be a feature about some kid who has been hiccupping for 30 days. And I have to say it.s very interesting.”

Miguel Castro, the London-based head of the Media & Society Program at the Open Society institutes, writes that the George Soros-based NGO has published today “a paper on the origins, evolution, and impact on privacy of advertising.” He continues: “Over the past decade and a half, advertising has become a fundamental element of the internet’s economy, the paper does not touch on the ‘consumerism’ issue, a discussion beyond media and the Internet, but argues that privacy has become a central topic for industry and policy discussions.”

ays Castro: “Advertising fuels most prominent services and platforms, including search engines, social networks, and news sites. In all its forms relies on data about users and the paper examines the privacy-related issues that any serious policy in this area needs to address. It foresees that online advertising will be shaped by the struggle between proponents of government regulation on the one hand, and of self-regulation on the other.”